Warburg Pincus Overtakes Permira in Survitec Race

LONDON (Reuters) – Montagu Private Equity has ended exclusive talks about selling Survitec to rival Permira, leaving Warburg Pincus frontrunner to buy the maker of life rafts and life jackets, people familiar with the matter said.

The latest twist in a sale that has been in the works since at least March highlights the continuing difficulties private equity firms face in striking deals, even with each other in so-called “secondary buyouts”.

It was not clear whether Permira’s bid for Survitec, which supplies lifeboats to the U.S. Navy and inflatable hospitals to the Red Cross, faded primarily because of difficulties over price, timing or financing.

However, Montagu is not a seller at any price and would not accept less than about 280 million to 285 million pounds ($464 to $472 million) for the Belfast-based company, according to some of the people.

On Nov. 6, a source familiar with the process said Permira had entered exclusive talks with Montagu about Survitec. [ID:nL6712983]

Carlyle Group [CYL.UL], the U.S. private equity firm that was also pursuing Survitec, offered much less than either Permira [PERM.UL] or Warburg Pincus [WP.UL], one of the people said on Tuesday.

Montagu, which bought Survitec in 2004, is also in talks with four rivals about the sale of its second-hand car dealership British Car Auctions (BCA). [ID:nLB193251].

Its other portfolio companies include waste management firm Biffa [WSAQTB.UL] and electronics retailer Maplin.

Montagu, Permira and Warburg Pincus declined to comment. Carlyle was not immediately available to comment. ($1=.6034 Pound) (Visit the Reuters DealZone blog here) (Reporting by Quentin Webb, Zaida Espana and Simon Meads; Editing by Hans Peters)